MANY NO LONGER NEED THE MIDDLEMAN – 3 OBSERVATIONS Few trends, in my view, are more exciting than the trend towards vertical integration. More and more businesses are recognising the power of vertical integration. Most of the world’s largest retailers are at least partially vertically integrated. Those largely vertically integrated include: Ikea Zara H&M In […]

MANY NO LONGER NEED THE MIDDLEMAN – 3 OBSERVATIONS Few trends, in my view, are more exciting than the trend towards vertical integration. More and more businesses are recognising the power of vertical integration. Most of the world’s largest retailers are at least partially vertically integrated. Those largely vertically integrated include: Ikea Zara H&M In addition, there is a growing number of retailers who increasingly sell home brand products, [produced exclusively for them. These include: Aldi Coles Woolworths I confidently predict that the vast majority of retail businesses and, indeed, the majority of businesses will be vertically integrated within 10 years. I can see no good reason why they would not be. Middle men are adding less and less value. Consider the many advantages of vertical integration including: Increased cost competitiveness Increased margins Increased control Cutting out a middleman who adds little value can cut costs and provide the capacity…